This is a guest post from Sheryl in Ontario, who is 40 years old with a grown daughter, and is trying to rebuild her retirement dream just 20 years too late for early retirement.

How much of anything is worth doing something constructive with? $5 ? 10 minutes? A half portion of pasta sauce? How many times do we dismiss the importance of the small amount? We clip coupons, turn out our unused lights, make coffee at home, but to what end? What do you save, and what do you waste?

I used to practice a home maintenance system whereby everything was done 15 minutes at a time. It is amazing what you can get done if you want to finish within a certain time frame.

If I budget $300 to spend on food, gas and other living stuff for a month, and I manage to only spend $260, how important is that other $40? Compared to the size of my mortgage, it almost seems like too small an amount to matter. What about a about a mail in rebate? I just received a cheque for $8.51 for dishwasher soap that had an incentive like that. That half cup of sauce? I’d have to add more to it to make a meal.

The small things add up. I have some containers in my freezer that I add small portions of leftovers to, they end up as soup, or a mixture of assorted pasta toppings (chopped tomato, basil, Italian sausage, roasted garlic and marinara on linguini anyone?).

I’m still trying to figure out the best system for small amounts of money though. Should I put that random $10 or $20 on my debt at the end of the week as I start my new weekly budget? Should I have it in my sock drawer to pay for unexpected yet non emergency fund worthy items? Should I put it in a high interest savings account and empty it on my debt when it reaches a certain level? Or should I use it as my fun money?

I know from experience that if I leave it in my wallet, there will always be a sale on something at a “stock up” price, or an invitation for dining out that will be too tempting. Depositing small cash into the bank seems tedious (I can imagine the bank teller’s face if I went in to deposit $7.89 in cash to my savings account).

$20 a week saved is $1,040 over the course of a year, which is definitely not an amount to dismiss. What do you do with little bits of things? Do you track it if it’s money? If you save $10 using coupons, do you just buy something else with the money you saved?

Comments

My paltry weekly take at a farmer’s market where I sell jewellery made in my “spare” time goes in a cache pot in the cupboard. Once it hits about $800 to $900 it goes into the bank. But, boy, does that cash ever add up fast when it’s NOT kept in my wallet or the bank.

I set up my budgets in Mint. I set all of my amounts to roll over. If there is $20 left over for food it stays with the food budget for when it might go over another month. Same applies for all other categories. Until the end of the year then it gets reset and the overall remainder of each budget amount goes as a lump sum contribution to either my TFSA or RRSP if there is any contribution room left. If not then high interest savings until a maximum of $5000 is there. That either becomes my vehicle savings fund or home emergency fund for things like furnaces, water heaters, shingles, doors and windows. After $5000 then investment fund here we come. Right now haven’t reached that point. Currently have TFSA room and still makes sense to contribute to RRSP at this point. At least I have a plan.

Sheryl – I’m not sure how other people are, but after a number of years of watching your spending and trying to amass savings, it seems that the urge to “spend it because it’s there or because I’ve “saved” it” doesn’t occur anymore at a certain point. There’s a downside to this as you don’t tend to treat yourself either like you could some times.

It’s been a long time since I’ve operated or had to operate on a cash basis but I think there’s some parallel to dieting. Say if you’re on Weight Watchers or calorie counting and have a limit set of 1500 calories a day and you’re sitting at 1250 for the day. Do you eat something that day just because you have the calories to “spend” or do you eat only if you are hungry? Or do you bank calories / points so you can have a feast with your favorite meal? If you have developed good habits and aren’t in diet mode, you eat only if you’re hungry or maybe are really craving something specific and the opportunity presents itself. If you are still having to watch yourself and haven’t developed good habits, you eat because you think you’re allowed.

I tend to think the ideal is getting to where you don’t just eat – or spend – because your allowance says you can. I’m at the ideal I guess with the money thing – now if I could only get there with the diet thing.

Disclaimer

I am not god. I am a mere mortal as such my reality is defined by my own views. So your reality might not resemble mine because of your views. As such all opinions, ideas and investments on this blog might not work for you as they did for me. Be a big person and do your own research and make up your own mind before trying something. You might need to contact a local professional for advice.